Project Financial Assessment (in $):

• Project A:

• Initial Cost: $50,000
• Year 1: $10,000
• Year 2: $15,000
• Year 3: $20,000
• Year 4: $25,000

• Project B:

• Initial Cost: $45,000
• Year 1: $5,000
• Year 2: $10,000
• Year 3: $20,000
• Year 4: $30,000

Required:

1. Calculate the payback period for each project.
2. If the standard payback period is 3 years, which project will you select?
3. Compute the discounted payback period at a cost of capital of 8%.
4. Determine the NPV of each project using a discount rate of 8%.
5. Calculate the IRR for each project.